Gamasutra expands upon the story of Valve's firing of engineer Jeri Ellsworth with the report that as many as 25 staff were fired by the developer yesterday. Details are scarce, though after contact with some of those involved, they say: "the impression we get is that these cuts were driven more by company challenges than by individual performance issues." They also have a speculative list of those who may have been let go by comparing the company's employee directory to a cached version from last month. Following up, Engadget has a statement about this from Valve Managing Director Gabe Newell:

"We don't usually talk about personnel matters for a number of reasons. There seems to be an unusual amount of speculation about some recent changes here, so I thought I'd take the unusual step of addressing them. No, we aren't canceling any projects. No, we aren't changing any priorities or projects we've been discussing. No, this isn't about Steam or Linux or hardware or [insert game name here]. We're not going to discuss why anyone in particular is or isn't working here."

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Companies fire people all the time, firing one person from Steam is a non story to me, firing the whole team would be a story. The spread was across different groups so it looks like some house cleaning, in a big company you often have clashes of personality or people who just can't cut it. Gabe mentioned in an address last month that they have to be aggressive about firing people, I suspect it is really easy for people to slack or go lonestar in that environment.